On April 26, the government banned the import of 10 luxury items for three months, citing the economic crisis. Now the Ministry of Industries, Commerce and Supplies is planning to extend the ban period, a highly placed source at the ministry tells ApEx.
Some economists and businesspersons say such a move goes against the spirit of free trade.
“The ban was imposed for a certain period. If this government believes in free trade and a competitive economy, it has no right to ban import of some select items,” says economist Ramesh Poudel.
He adds prohibiting imports means the risk of informal market proliferation, which will ultimately hurt the revenue collection. This risk is more present in a country like Nepal, which shares an open border with India.
Out of 5,012 listed items of import, the government had banned only 10 items deeming them luxury goods.
The source at the Supplies Ministry says a proposal to stay the ban is due to be tabled before the Cabinet. “It is now up to the Cabinet to make the decision,” the source tells ApEx.
Rajesh Kumar Agrawal, vice-president of the Confederation of Nepalese Industries, says the government is promoting black-marketeering by banning imports of goods.
“The goods that are supposedly banned are still available in the market. Where are they coming from if not from illegal channels,” he says.
Former Commerce Secretary Purushottam Ojha says it is not right to discriminate and ban certain goods without any valid reason.
“If the government was so concerned, why didn’t it ban the import of items like Guthka that are harmful to health?”
Concerned importers and traders have urged the government to review its decision, or at least the items on the ban list. They say the decision was made without any study.
Dinesh Shrestha, vice-president of the Federation of Nepalese Chambers of Commerce and Industry, says the government should review the list if it is planning to ban the so-called luxury goods.
“It should conduct a thorough study and consult the concerned importers before deciding to impose a ban,” he says.
Finance Ministry Spokesperson Dhundiraj Niraula says if a certain good is cheaper for Nepal to import than to manufacture in the country, there is no point banning its import.
“The Supplies Ministry should study all aspects and implications of prohibiting import of goods before taking further decisions,” he says.
Kamalesh Agrawal, senior vice-president of Nepal Chamber of Commerce, suggests that the government come up with a strategy that is a win-win for all.
“Nepal’s largest import is petroleum products. This is the right time for the government to curb their consumption by adopting electric vehicles,” he says. “I understand luxury goods are unnecessary during bad economic times. But that doesn’t give the government the right to enforce arbitrary bans without any study.”
